The cash-short United States Postal Service, which has failed to win congressional approval to stop delivering mail on Saturdays to save money, has struck a deal with the online retailer Amazon.com to deliver the company’s packages on Sundays — a first for both, with obvious advantages for each.

For the Postal Service, which lost nearly $16 billion last year, first-class mail delivery, particularly on Saturdays, is often a money loser, whereas package delivery is profitable.

The deal, announced on Sunday and taking effect immediately, in time for the holiday shopping season, gives the Postal Service a chance to take some business from United Parcel Service and FedEx, which do not deliver on Sundays. Now, some orders that would have been handled by either of those carriers for Monday delivery will go through the Postal Service and arrive on Sunday.

For this shopping season, this service, offered at no additional cost to Amazon’s customers, is limited to those in the New York City and Los Angeles metropolitan areas. Amazon and the USPS are looking at expanding it to other large metropolitan areas in 2014.

Sunday delivery in major metropolitan areas is not a new thing for the USPS. It offers Sunday delivery of items shipped via Priority Express in those areas for an additional fee. This new deal is a manifestation of the USPS’ attempt to reinvent itself to take full advantage of e-commerce.

Personally, I like it, though I don’t expect Amazon to ever expand it to cities such as Milwaukee even though the USPS does offer Sunday delivery of Priority Express items here. I would like it more if the USPS were privatized.

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Pound for pound (that is, dollar for dollar), the USPS is one of the stupidest issues facing the United States. Our idiot electorate needs to make up its mind: the USPS is either a government agency that we pay out the nose for or a private corporation with a special charter for the sake of logistics.

No other private corporation has to deal with Joe Biden Door-to-Door-Amtrak-style Mandates like the USPS. And no other government agency is expected to turn a profit while doing the bidding of the state.

Either their goal is to remain solvent, or it’s to obey the mandates of idiot Congressmen pandering to idiot voters who expect a private corporation to massage their nostalgia.

Let’s not be so quick to jump on this bandwagon. Of course this makes perfect sense for Amazon. But does this make sense for tax-payers? Let’s think about this… The USPS is hemorrhaging red ink and most certainly will not make up any short-fall by delivering Amazon packages. And what does Amazon get out of this? Most certainly a cheaper cost of delivery for them ultimately subsidized by who? You guessed it, the American tax payer.

@ReaganVol – as far as I know, the USPS is no longer subsidized by Tax dollars, hence the mandate to turn a profit. Of course, they also have a heap of other mandates which make it extremely difficult to turn a profit…

Let’s not be so quick to jump on this bandwagon. Of course this makes perfect sense for Amazon. But does this make sense for tax-payers? Let’s think about this… The USPS is hemorrhaging red ink and most certainly will not make up any short-fall by delivering Amazon packages. And what does Amazon get out of this? Most certainly a cheaper cost of delivery for them ultimately subsidized by who? You guessed it, the American tax payer.

ReaganVol on November 11, 2013 at 12:04 PM

The financial details weren’t released, but one would hope that even a government enterprise would not take a loss.

The USPS turns an operation profit every quarter. It’s the prepayment for disability retirement that’s puts us in the red. On time delivery of packages is equivalent to both FedEx and UPS and pricing is often better. The USPS has reduced staffing in letter carrier, clerk, and mail handling crafts by 25%. We have instituted real time tracking of packages to give consumers what they say they want from a delivery service. Selected cities are also testing out same day delivery for messenger-type services. We are doing everything possible under the ridiculous government constraints to become profitable.

It may make the USPS a little money as long they limit it to dense urban areas. As long as this additional service operates in the black, writing as a rural flyover country dweller, I don’t have a problem with USPS offering this and well understand it could only be profitable in densely populated areas with a high package volume.

That being said I am very skeptical that it will turn a profit. The USPS recently changed mail handling here and now it ships 2 hours away and comes back, supposedly to save money, and has increased local across town mail delivery from sometimes less than 24 hours depending where it is going and usually 1-2 days to 7-8 days causing me to be late on some local vendor bills. While a change in local pickup to no later than noon at mail boxes (highly inconvenient) has saved them $ on labor, consolidating and closing the 5 year old regional processing center into one 120 miles away has increased processing costs and it has all been a wash… well, except for the dramatic reduction in service and delivery time that is. The stupidity is strong in the USPS and I think everyone in charge got there through the Peter Principle.

The USPS turns an operation profit every quarter. It’s the prepayment for disability retirement that’s puts us in the red. On time delivery of packages is equivalent to both FedEx and UPS and pricing is often better. The USPS has reduced staffing in letter carrier, clerk, and mail handling crafts by 25%. We have instituted real time tracking of packages to give consumers what they say they want from a delivery service. Selected cities are also testing out same day delivery for messenger-type services. We are doing everything possible under the ridiculous government constraints to become profitable.

postaldog on November 11, 2013 at 12:37 PM

A pre-payment that the dwindling portion of private enterprise that offers a pension plan makes under the pain of law.

I am a constitutional conservative, and that means that I have to take the good of the Constitution along with the bad. As it happens, the post office is in the Constitution, even though some of the Framers thought it’d be a waste of money. So there you go.

As it happens, I think it’s a good example of how a profit motive is really the best driver of innovation. Even though the post office is supposed to be “quasi-private” and has to balance its books, somehow they missed the boat on package delivery and the internet, and now find themselves an agency devoted to delivering junk mail and bills. And, they are trying to balance their budget in light of crippling unfunded government pension liabilities. . .

..I saw this happen yesterday (live in Orange County in SoCal) and asked the postalperson what the deal was. He explained that he was delivering for Amazon but I did not make the connection until Steve wrote it up here.

Mohonri makes an excellent point above to which I add: (1) it’s a start and (2) would you rather have it go this way or that the USPS bumps up the postage next week.

Subcontracting with Amazon and using assets that would otherwise sit idle on the seventh day ought to hold that eventuality off for at least a fortnight.

Amazon runs at a profit loss. The USPS runs at a profit loss. It’s a win-win!

SouthernGent on November 11, 2013 at 1:00 PM

Actually, Amazon runs at an operational profit. The difference is that Amazon then turns around and spends every last dime of its profit on mergers & acquisitions and r&d and such, rather than pay a dividend to its shareholders.

In terms of priority packages, the post office is really good in delivering them quickly. I have never had one lost or late. In fact i have no problem with my mail delivery at all. Probably the one thing the ferals do right.

These companies have been piggybacking off of the Post Office for a while. I noticed it a few years ago when I would order something and it would be delivered by the Post Office even though the carrier was UPS or FedEx. It was called ‘SmartPost’ I believe. It obviously saves these companies money if they can just deliver it to the taxpayer subsidized post office rather than take it all the way to your door.

A pre-payment that the dwindling portion of private enterprise that offers a pension plan makes under the pain of law.

Steve Eggleston on November 11, 2013 at 12:47 PM

What other business, public or private, in this country is required to prepay disability retirement 75 years into the future? To the tune of $6 billion per year? Drop that on FedEx and UPS and see how they function.

The USPS is not taxpayer subsidized. It pays for itself through postage. The USPS turned approx. $330 million in operational profit last fiscal year. That was wiped out by the $5.5 billion/yr future health benefits pre-pay mandated by law that no other public or private business is required to pay out.

What other business, public or private, in this country is required to prepay disability retirement 75 years into the future? To the tune of $6 billion per year? Drop that on FedEx and UPS and see how they function.

postaldog on November 11, 2013 at 4:22 PM

Every private business that has a pension plan. That’s why FedEx and UPS no longer provide a pension plan for new employees.

Every private business that has a pension plan. That’s why FedEx and UPS no longer provide a pension plan for new employees.

Steve Eggleston on November 11, 2013 at 6:15 PM

Those companies are not required by law to pre-pay 75 years worth of future retiree health benefits over a 10 year period. All the PO has asked is the flexibility to cover those costs and maintain financial solvency while restructuring.

This could be solved if Congress would return the $50-75 billion in pension costs overcharged to the PO since 1971. But since those funds count as income for the Fed, they would have to either make some spending cuts (Dem no,no) or raise taxes (Rep no,no), and neither of those things are happening anytime soon.

So we’re back to square one — give us the same latitude as you would any other business.